Data Use Cases

Location Based Marketing & Advertising Trends for 2020

Location Based Marketing & Advertising Trends for 2020

Location based marketing is rapidly increasing in popularity thanks to its proven efficiency and impact. According to BIA Advisory Services, the predicted expenditure by marketers on geo-targeted campaigns for 2019 in the US alone was more than $26 billion. And this amount is only anticipated to increase throughout 2020 and beyond.

A 2019 report by Factual revealed that  almost 9 in 10 marketers believe that location based marketing and advertising has increased their sales, enhanced their customer base, and boosted their customer engagement.

“Almost 9 in 10 marketers believe that location based marketing and advertising has increased their sales, enhanced their customer base, and boosted their customer engagement.”

With the industry now having such high levels of confidence in the technique, location based marketing and advertising is expected to continue to rule the year 2020. Let’s take a look how.

First off, we should make sure to understand what location based marketing and advertising actually is.

What is location based marketing/advertising?

Location based marketing and advertising uses location data provided by customers to send these customers timely and relevant advertisements. This form of marketing has shown to generate better campaign engagement and drive valuable insights based on customer behavior.

It’s no surprise that the majority of your customers carry a smartphone with them. Indeed, most freely share their location data through the various apps that they use. This is where marketers get an opportunity to pitch in their services based on real-time mobile location data.

Let’s take a look at an example of location based marketing in action. Say you are enjoying a weekend out of town, and suddenly your mobile vibrates. Your favourite clothing store is offering you 20% off today. But there’s not a store for miles around, and besides, you’re taking time off. You ignore the notification.

Now imagine that you get the same message just as you arrive at a mall with an outlet of your favorite store right on the ground floor. Now that’s a more tempting offer — one you could actually make use of.

It’s safe to say that it’s far more likely that you will pay attention in the latter case. That’s the power of location based marketing in action.

Now that we have a clear understanding of what location based marketing is, we’ll explore some of the location based marketing trends that are expected to take 2020 and the coming decade by storm.

Location Based Marketing and Advertising Trends in 2020

Relevant and personalized advertising

It goes without saying that a successful business needs successful advertising Companies often strive to make their marketing and advertising messages as appealing to their customers as possible, yet the stats suggest many of them are not having as much success in this as they could be.

“Location based marketing has been found to be 20-times more effective when compared to displaying generic banner ads.” 

According to a study on mobile marketing, it was found that over 40% of customers, who receive marketing communications from businesses on their mobile devices, feel that the communications are neither useful nor relevant. This is one area where location based marketing is expected to turn things around.

Location based marketing changes the game by making use of location data provided by customers to ensure they are only being sent relevant and useful content, at helpful times.

For instance, if a customer visits a mall, they might receive a notification from a nearby coffee shop with an exciting offer. It’s much more likely that the customer will consider such an offer, as it is both relevant and timely. By ensuring these two qualities in your advertisements, location based marketing leads to better customer engagement, driving better results for your business.

And the statistics back this up. According to an article on Entrepreneur, location based marketing has been found to be 20-times more effective when compared to displaying generic banner ads.

Hyperlocal marketing and Geofencing

With efficiency always being a top concern in any marketing campaign, marketers are trying their best to reach out to as many target customers without overspending.

Hyperlocal marketing is one way this can be done, as customers are targeted based on relevant, specific destinations inside a geographically restricted area. These destinations are often points of interest, and the area around them within which a customer would be sent a notification is called a geofence.

Indeed, geofencing is becoming one of the top use cases for location data in marketing.

This benefits of using hyperlocal marketing and geofencing is that they allow both small and large businesses to capitalize on the fact that a customer is more likely to buy from shops in the area they live in.

Mobile App Localization for Audience Segmentation

It is believed that mobile app localization will become mainstream. Companies will localize their mobile app content, thus tailoring their strategy to the specific target region.

By segregating their audience in such a way. companies will be able to deliver a better overall customer experience and increase the effectiveness of their advertisements.

Smart Spaces

An unexpected trend for location based marketing is it’s potential collaboration with smart spaces. Smart spaces are physical environments that allow individuals to interact with interconnected networks. Think of smart home security systems and personal assistants, like Google Home or Amazon's Alexa.

"Your refrigerator can remind you to buy eggs as you enter a grocery store of your choosing."

The increasing incorporation of smart spaces into our environments will make it not only easier for a company to reach out to them via these devices, but also easier for customers to remind themselves to buy products from or via these companies.

On the one hand, more smart products allow for better monitoring of customer behavior and more opportunities to showcase ads in an non intrusive way, since the device is already around the customer. From another perspective, customers also target themselves by integrating company's smart products into their lives and becoming dependent on them.

As smart spaces become even more integrated into our lives, marketers will be better able to make use of their closeness to customers and provide not only better targeted advertising, but also a better and more tailored customer experience.

Increased Customer Participation

One of the main challenges in using location based marketing is staying in line with data privacy laws and acquiring customer consent. This is shown by the importance of the GDPR in Europe and the recent CCPA in California. As more and more customers are getting aware of their privacy settings, it can be a challenge for brands to persuade customers to share their location with them.

However, it’s already very common for users to share their location data with apps that they interact with. Furthermore, as users become more aware of the benefits of collaborating with companies to receive deals and offers, it will become even easier to implement location based marketing campaigns.

Along with data privacy laws, one thing that will help customers to engage with location based marketing is the rise of proximity marketing apps. These apps allow customers to exercise control over what messages they receive, thus only allowing brands to send relevant messages to users who are interested in receiving such communications. This works to the benefit of both the company and the customer, so no one’s time is wasted.

With apps and data becoming ever more integrated into our lives, it’s likely that customer acceptance of location based marketing strategies will only increase.

Excited About the Future

The field of marketing as a whole is known for adapting to technology. To really engage with their target audiences, brands have begun to use immersive VR experiences in their marketing strategy. The use of augmented data and virtual reality is already on a rapid rise and it seems like more businesses will implement it as VR becomes more intertwined in our lives. These technologies help in creating engaging campaigns.

A contemporary example is Ikea Palace, the AR furniture mockup app of Ikea. In a revolutionary step in marketing, Ikea Palace used virtual reality technology to give consumers a realistic simulation of the products they would purchase, including testing furniture, cuddling with simulated pandas, and having virtual pillow fights.

It's always exciting to see developments as such.

What could we expect from location based VR technologies? In theory, retailers can now invite customers for personal VR tours to showcase their store layouts, once they have identified the the brick-and-mortar closest to their geo preferences.

Interesting to see where this leads.

To Wrap Up

If you’re looking to stay ahead of the curve in the next decade of marketing strategy, location based marketing is definitely something you should consider. By enabling you to showcase your brand to willing customers at ideal locations, at the right time, location based marketing is highly likely to improve the efficiency of your campaign and improve sales.

With positive trends in all of its main use cases, location based marketing certainly looks like it will drive even better results in 2020 and beyond.

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